Freddie Mac has sued Bank of America, UBS, JPMorgan Chase and a dozen other banks over alleged manipulation of the London interbank offered rate, saying the mortgage financier suffered substantial losses as a result of the companies’ conduct.
Bloomberg reports that U.S. Government-owned Freddie Mac accuses the banks of acting collectively to hold down the U.S. dollar Libor to 'hide their institutions’ financial problems and boost their profits', according to a complaint filed in federal court in Alexandria, Virginia.
Defendants’ fraudulent and collusive conduct caused USD LIBOR to be published at rates that were false, dishonest, and artificially low,” Richard Leveridge, a lawyer for Freddie Mac, said in the complaint, which was made public Tuesday.
Manipulation of interest rates by some of the world’s biggest banks has spawned probes by half a dozen agencies on three continents in what has become the industry’s largest and longest-running scandal. More than $300 trillion of loans, mortgages, financial products and contracts are linked to Libor.
The complaint lists 15 banks as defendants as well as the British Bankers’ Association. They include Citigroup Inc. (C), Barclays Plc, Royal Bank of Scotland Group Plc (RBS), the Royal Bank of Canada, Deutsche Bank AG and Credit Suisse Group AG. (CSGN).
Hit the link below to access the complete Bloomberg article:
image: © Lisamarie Babik